Phoenix – Diverse Economy, Thriving Business Climate

The Phoenix Chamber of Commerce proudly touts the city as “one of the most vibrant and livable communities in the United States.”

For decades, visitors have come to Phoenix in search of the myriad recreational activities the region offers, as well as for its dry, sunny climate. Last year, Arizona attracted 25.6 million leisure and business travelers, who poured nearly $11.5 billion into the state’s economy. Approximately $5 billion was spent in Metro Phoenix.

Recognized as a good place in which to do business, the city’s positive job growth in 37 of the last 40 years helps make it corporate home to such companies as:

  • America West Airlines
  • Best Western International
  • Callahan Mining Corp.
  • Boeing Helicopter Company
  • U-Haul International

It’s also the regional headquarters for:

  • American Express
  • Bull Worldwide Information Systems
  • Prudential Property & Casualty Insurance Co.
  • State Farm Insurance Company
  • Wells Fargo Bank

Community Profile:

National comparison – Sixth largest city in the United States
Population – 1.2 million
Area – 420 square miles of Arizona’s Salt River Valley
Median income – $32,950
Average new home price – $162,086
Average monthly apartment rent – $640
Unemployment rate – 2.9 percent (in 1999)

Its employment base comprises more than 1.4 million workers in a variety of industries:

  • Manufacturing – 77%
  • Service – 50%
  • High Tech – 30% of all manufacturing employees (this is compared with a national average of 10%)
  • Tourism/hospitality – More than 130,000 people

Some of its larger employers include:

Employer – Number of Employees

State of Arizona – 63,961
Motorola – 18,500
City of Phoenix – 13,300
Maricopa County – 12,963
Wal-Mart Stores, Inc. – 11,900
Arizona District of the U.S. Postal Service – 10,722
Allied Signal Aerospace Company – 10,500

Economic Climate “Clear and Sunny”

The Greater Phoenix Chamber of Commerce says Phoenix is a “hot spot for entrepreneurs,” citing:

  • Excellent location
  • Good access to a skilled work force
  • Fine reputation as an attractive place to live

The city ranks first nationwide in percentage growth of new employees and second in new business establishments. Its metro region has enjoyed six years of record-breaking construction activity. And last year, Fortune magazine placed Phoenix at No. 4 among the country’s top 10 boomtowns.

Currently, job seekers find openings in:

  • Technical fields
  • Health care
  • Construction
  • Service industries (including tourism and business services)
  • Manufacturing (including basic and electronics/semiconductor)
  • Financial/professional sector
  • Transportation/distribution

On the technology side, a 1998 report issued by Arizona State University revealed that high-tech manufacturing “accounts for one of every five jobs in Arizona and has a greater economic impact than any other industrial sector.”

Motorola, Allied Signal and Honeywell first brought high tech to Phoenix in the 1950s. Today, Motorola is the city’s largest employer; and Allied Signal and Honeywell merged to create a huge Phoenix-based aerospace unit.

Fortune 300 company Avnet Inc. — a distributor of semiconductor, interconnect, passive and electromechanical components — is the largest business headquartered in Phoenix. Avnet, which employs nearly 9,000 in the region, reported annual sales of more than $6.4 billion in 1999. Other key players in the city’s technology arena include:

  • MicroAge Inc.
  • Insight Enterprises Inc.
  • Intel Corp.

More Fine Weather Ahead

According to Karl Gentles, media and communications manager for the Greater Phoenix Economic Council, the outlook for Phoenix is the brightest it’s been in the last decade.

Gentles notes that several factors led to the region’s emergence as one of the country’s best places to do business:

  • Strong and skilled labor force
  • Environment less costly for businesses than other communities with technology-based economies
  • Quality of life that is “unparalleled” compared with other technology communities

He also says, “In addition, our university systems are among the best in the nation, and have structured innovative partnerships with industry to train workers.”

The city’s growth hasn’t been without its challenges, though, and Gentles admits that issues like transportation will need to be addressed. The city won approval for a light rail system and expects to upgrade its overall transportation infrastructure to accommodate increased traffic.

Gentles explained: “I believe the answer is to plan for the growth, not just let it happen. We’ll continue to invest in our universities and our community in general, to be sure the community understands what the new economy will bring. And we will take action — legislative and individual corporate action, for instance — to be ready for a new way of business.”

Leave a Reply

Your email address will not be published. Required fields are marked *